Treating a batch level cost as though it were a unit level cost will cause too much overhead to be allocated to the products that are produced in large quantities.

Question

Quizplus · Accepted Answer

Batch level costs are fixed for a set number of units produced together, so allocating them on a per-unit basis means products made in larger batches will absorb more overhead than they should, distorting the cost per unit.

Treating a Batch Level Cost as Though It Were a Unit